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3 Borrowing and lending: the basics, (Shipman,2019,p. ) - Coggle Diagram
3 Borrowing and lending: the basics
definitions
Principal
3.1 Categories of debt
debt types
security form
unsecured debt
Secured debt
charge types
Fixed-rate debt
variable-rate debt
3.2 The cost of borrowing
Simple and compound interest
interest rate work out
Simple interest
compound interest
Reducing-balance loans
loan payment method
repayment loan
Interest-only loan
Comparing costs of different loans: annual percentage rate
(APR)
additional costs
the reason of APR AND USEFULNESS
APR definition
3.3 Individual interest rates and credit scoring
DETERMINE THE BANK RATE FOR INTERBANKS
DETERMINE THE INTEREST RATE FOR INDIVIDUAL
assess the creditworthiness borrower risk assessment
Borrower credit score assessment detailed process
big data
credit reference
agency,
credit score
creditworthiness
3.4 Alternatives to interest
asset-based or lease-based finance
mutual funding (sukuk)
(Shipman,2019,p. )